Loan payments, Medicaid, school funds and payroll are priority for comptroller's office

Tuesday

Feb 23, 2010 at 12:01 AMFeb 23, 2010 at 11:23 PM

Comptroller Dan Hynes' office would promptly pay all of the state's bills if there was enough cash available to pay them. Unfortunately, cash isn't coming into state coffers as fast as the bills are arriving, leaving Hynes' staff to allocate the payments as best they can.

Doug Finke

Comptroller Dan Hynes' office would promptly pay all of the state's bills if there was enough cash available to pay them.

Unfortunately, cash isn't coming into state coffers as fast as the bills are arriving, leaving Hynes' staff to allocate the payments as best they can.

"Our priorities for the remainder of the fiscal year have to be debt repayment, general state aid to schools, expedited Medicaid payments and payrolls to keep government running," said Hynes spokeswoman Carol Knowles. "We can't afford to have our credit rating downgraded even further."

Right now, the biggest single monthly commitment facing the state is repaying short-term loans obtained earlier in the year. Just over $500 million a month is needed each month through the end of the budget year June 30, except for April when the repayment jumps to $750 million. That's just to repay the short-term loans the state took out this year. Another $45 million is needed each month to repay pension bonds and $79 million to repay bonds issued for capital improvements.

The second largest monthly commitment is about $450 million to make Medicaid payments to doctors, hospitals and nursing homes within 30 days. By quickly making those payments, the state qualifies to get additional federal Medicaid reimbursements. The state could divert some of the Medicaid payments to other bills, but that would stretch out the payment cycle and the state would lose some of the federal reimbursement.

Another $100 million is expedited payments to health facilities that treat very large numbers of Medicaid patients, although that program is on-going and not tied to federal stimulus funds.

The Health Care Council of Illinois represents about 650 nursing homes in Illinois. Council executive director Pat Comstock said that at the time Congress approved the stimulus plan, many Illinois nursing homes were six months or more behind in payments. No more.

"Right now we are in a better (payment) spot than we have been in 15 years," Comstock said. "There is no question we are one of the beneficiaries of the federal stimulus package."

The state is also trying to keep current on payments of general state aid to school districts, even as reimbursement for other expenses, like transportation or special education, lag. General state aid payments cost about $418 million a month.

"State aid payments are being delivered for the most part on time and in full at this point," said Dr. Brent Clark, executive director of the Illinois Association of School Administrators. "That's kind of life blood."

Especially for most downstate districts, which rely more on general state aid than wealthier districts. Wealthier districts get most of their state assistance through reimbursements for things like transportation costs. Clark said the state is about $700 million behind in those.

Ensuring state workers receive their paychecks on time takes another $335 million a month. All together, those obligations come to more than $1.9 billion.

"That's nearly $2 billion a month and with revenue down, it leaves little or nothing for anything else," Knowles said. "Critical health and safety and social services have been top priorities."

The office also tries to help when they hear from state contractors skirting financial disaster because the state is so far behind in payments to them.

"We try to address those as we can, but with a backlog as large as the state has now, it becomes difficult if not impossible to do that," Knowles said. The backlog is expected to hit $6 billion by the end of June.